Race, Sex and Disability Commissions

Lord Ashley of Stoke: asked Her Majesty's Government:
	Whether they intend to merge the commissions on race, sex and disability or to keep them separate.

Baroness Scotland of Asthal: My Lords, my honourable friend the Minister of State at the Office of the Deputy Prime Minister announced the start of a project to consider the feasibility of, and options for, a single equality body in Great Britain earlier this year. I refer my noble friend to the reply that my noble and learned friend the Lord Privy Seal gave to my noble friend Lady Dean of Thornton-le-Fylde on 14th May 2002. This project is ongoing and we expect to announce our initial findings in the autumn.

Lord Ashley of Stoke: My Lords, I thank my noble friend for that helpful response. Is she aware that many disabled people and organisations, including the Disability Rights Commission, are deeply worried that any new arrangement will mean that the rights and interests of disabled people suffer? Does she agree that tackling disability discrimination is different from dealing with other forms of discrimination, because it is a matter not only of dealing with prejudice, but of improving access, which costs money? That necessarily means that special consideration should be given to disability and to its funding. Can the Government give an assurance on those points?

Baroness Scotland of Asthal: My Lords, of course we understand and honour the worries and concerns that are being expressed by those who suffer from a disability, who have only recently had a commission of their own. I assure the noble Lord that the Government understand the difference between the various species of discrimination. We will very carefully consider all the representations that are made by all the groups before we take any step on this matter.

Lord Campbell of Croy: My Lords, while gender and race are fixed personal characteristics, disabilities, which can be of various kinds, may arise and affect people at any time during their lives. Is there any reason why they should be grouped together?

Baroness Scotland of Asthal: My Lords, these are very important issues, which we shall consider after the consultation. There is no fixed decision at the moment. A number of models have been suggested, including a federal system, with the current commissions remaining under a new framework. We have no fixed position on what may be best. We shall consider the consultation openly. We hope that all who are interested will put their views forward forcefully and fully so that they can be properly considered.

Lord Lester of Herne Hill: My Lords, I have been involved with the subject for 40 years, I am afraid. I strongly welcome the commitment to the Government's proposal. In addition to considering the case for a single Equality Commission, will the Government also consider the case for a single equality Act? The Minister may know that the chair of the Disability Rights Commission has said that he would be much more sympathetic to a single Equality Commission if there were a single equality Act that covered disability discrimination as strongly as the other forms of discrimination. Will the Government have an open mind about that, as they seemed to indicate in a debate on the subject on 25th April 2001?

Baroness Scotland of Asthal: My Lords, we are looking at the whole area. I hear what the noble Lord says about the benefits of a single equality Act. He will know that there has been a lot of debate and discussion about that. There are some significant difficulties to overcome in arranging such a move. The consultation is open. We shall consider what everyone has to say. To that extent, nothing is ever closed, but I would not like your Lordships to think that this is likely to happen very quickly in the foreseeable future.

Lord Morris of Manchester: My Lords, even at this early juncture will my noble friend accept, from those of us who work day by day with the disability organisations, that a single Equality Commission without a single Equalities Act—one that would recognise the reality that effective legislation to protect disabled people must differ in fundamental respects from other anti-discrimination legislation—would be seen by disabled people as a step, not forward but backward? What special arrangements are being made to ensure that disabled people are fully and meaningfully consulted, bearing in mind their difficulties often in achieving even equal access to the consultative process?

Baroness Scotland of Asthal: My Lords, all these are genuine points for anxiety and concern. I assure noble Lords that every effort is being made to ensure that all those who represent disability interests are consulted and brought in. The consultation process is ongoing and the Government are very anxious to hear all opinions on how to fashion any new step to make sure that it does not inure to the disadvantage of any group. Any change must be beneficial and advantageous to all.

The Lord Bishop of Oxford: My Lords, given the wide range of concerns that have been expressed in the House today, will the Minister explain exactly where the Government see the benefit and advantage of merging the commissions? While I am on my feet, I pay a brief tribute to the right reverend Prelate the Bishop of Bradford, who is so associated with good work on race and religion and who is retiring from the House tomorrow.

Baroness Scotland of Asthal: My Lords, I think that it would be inappropriate for me to make a positive case now one way or the other. We have certainly listened to the arguments; there are arguments on both sides of the divide. The Government's consultation paper Towards Equality and Diversity, published in December 2001, set out our proposals for implementing the EC employment and race directives. It also stated that we saw arguments in favour of a single statutory commission in the longer term. Following that, on 15th May, we announced a project to examine the feasibility of and options for creating a single equality body for Great Britain. That is what it is—a feasibility study. We shall examine that feasibility study and all that it tells us with great care before taking any further steps.

Baroness Greengross: My Lords—

Lord Renton: My Lords, will the Government bear in mind that there are vast numbers—

Noble Lords: Cross Benches!

Lord Williams of Mostyn: My Lords, I think that it is the turn of the Cross Benches.

Baroness Greengross: My Lords, does the Minister agree that for legislation and its translation into policy to be truly accessible and consumer or user led, it must be the experts—in this case the commission, and a single commission—who advise the individual on the best way to ensure redress or compensation? Therefore, a one-stop shop backed by a single Act is essential, as many people could be eligible under the Act on more than one ground—for example, age or disability or race or gender.

Baroness Scotland of Asthal: My Lords, that is certainly a powerful argument—the noble Baroness has made the case—for why we have to consider all points of view before deciding which course would be best for all concerned. The noble Baroness is quite right that the species of inequality come in many different forms, all of them infringements in one way or another of people's human rights.

Non-Executive Directors

Lord Ezra: asked Her Majesty's Government:
	Whether they intend to provide a statutory definition of the role of non-executive company directors.

Lord Sainsbury of Turville: My Lords, the Government published their White Paper on company law on 16th July. The White Paper proposes a statutory statement of directors' duties. The Government have also asked Derek Higgs to conduct a review of the role and effectiveness of non-executive directors.

Lord Ezra: My Lords, I thank the noble Lord for that reply, and I am aware of the review being carried out. Meanwhile, I find it a bit surprising—I ask the noble Lord whether it was deliberate—that no reference was made to non-executive directors in the document to which he referred, the White Paper on company law. I should have thought that in the light of the present uncertainty about corporate affairs such reference would have been necessary.
	Furthermore, in view of the importance attached to the independence of non-executive directors, is the Minister aware that there is some ambiguity about this in the Combined Code which lays down the rules for corporate behaviour in that it refers to the appointment of,
	"non-executive directors (including independent non-executive directors)"?
	Is there a new class of non-independent non-executive directors?

Lord Sainsbury of Turville: My Lords, the White Paper on company law to which the noble Lord refers accepted the conclusions of the company law review that there should be a statutory statement of directors' duties and that all directors should be subject to the same set of general duties regardless of any particular duties they may have under service agreements as employees. As the noble Lord said, the draft statement does not define the role or the independence of non-executive directors. However, considerable work is going on in the form of the interim report of the Co-ordinating Group on Audit and Accounting Issues. The report has a bearing on the question of the role of non-executive directors and contains two recommendations clearly to that effect. The question of the role of the non-executive directors will clearly be considered in the light of that. The issue of definition also is important. It is likely that the matter of non-executive directors' independence will require greater definition than the term non-executive director.

Lord Barnett: My Lords, will my noble friend clarify whether the Government are truly considering legislation in this regard? In view of the role of non-executive directors in current circumstances, and especially because they must man the audit committee of most major companies—I am sure that he recognises that role—has he in mind moving towards European-style supervisory boards of non-executive directors?

Lord Sainsbury of Turville: My Lords, as I hope I made clear, related work is under way. The interim report of the Co-ordinating Group on Audit and Accounting Issues recommended an examination of the improved combined code guidance for audit committees on their responsibilities and how to meet them. That is being taken forward by the Financial Reporting Council. The report also recommends that the Government consider underpinning in company law the role and responsibility of audit committees. Those two steps are bound to relate to the question. However, I know of no proposals on supervisory boards.

Lord Marlesford: My Lords, does the Minister believe that a primary role and responsibility of a non-executive director is to become aware of the potential insolvency of the company just as soon as any executive director becomes aware of it, and to see that that information is immediately transmitted to the shareholders and the investing community in general?

Lord Sainsbury of Turville: My Lords, in this, as in so many other respects, non-executive directors' responsibilities are similar to those of all other directors. Indeed, that is one of the arguments being put forward in relation to whether we need a particular definition of a non-executive. However, I should have thought that, in this and many other matters, the role of the non-executive is the same as that of other directors.

Lord Borrie: My Lords, I declare an interest as a non-executive director. Does my noble friend agree that it would be better if the law did not perpetuate the fiction that a non-executive director has as much knowledge, control and influence over the affairs of a company as an executive director? Would it not be better if those roles were set out separately and clearly so that we all understand where we are?

Lord Sainsbury of Turville: My Lords, it is exactly that kind of question that is being looked at at the moment. Some believe that all directors should be the same. However, the noble Lord makes the fair point that in some aspects directors are not the same. Those are the kind of issues which need to be considered.

Lord Hooson: My Lords, is not one of the problems that so many non-executive directors are executive directors of other companies? As regards remuneration committees, do they not have a vested interest in keeping board salaries at as high a level as possible? How does the Minister propose to deal with that problem?

Lord Sainsbury of Turville: My Lords, it is difficult to find someone who does not have a view who is at the same time expert enough to act as a non-executive director. I believe that the right way to approach the matter is to strengthen the role of shareholders, as we are doing through regulations, so that there is greater transparency rather than to believe that one can get a competent non-executive director who has no links with the business world.

Traffic Measures in London

Lord Peyton of Yeovil: asked Her Majesty's Government:
	To what extent traffic measures proposed by the Mayor of London are discussed with or notified to government departments.

Lord McIntosh of Haringey: My Lords, the Mayor of London, through Transport for London, has powers to regulate traffic. Traffic measures are sometimes discussed among other matters when the Mayor meets transport Ministers from time to time. Transport for London also discusses traffic proposals with the Highways Agency as part of normal liaison procedures. However, in general, there is no formal requirement for Transport for London or other local traffic authorities to notify, or seek consent from, the Government about proposed traffic measures except in a few cases surviving from the Road Traffic Regulation Act 1984 such as notification of the installation of a pedestrian crossing or consents to close roads for certain special events.

Lord Peyton of Yeovil: My Lords, that Answer does nothing to diminish my anxieties. I wonder whether the noble Lord could give us some idea as to how long the Government can realistically expect to stand aside from the impact of the Mayor's plans for London, both as regards their cost and their physical disturbance? Likewise, can they really continue to ignore the tissue of measures which the Mayor is taking currently, including even the rephasing of traffic lights, to exclude the motor car from London? I wonder whether the time has not come to grapple with this joker whose jokes may not be all that funny in the end.

Lord McIntosh of Haringey: My Lords, I am sorry that my careful and factual response to a legitimate Question should cause the noble Lord, Lord Peyton, anxiety. He is in effect asking for the repeal of the Greater London Authority Act 1999. The Government have no intention of repealing that Act.

Lord Campbell-Savours: My Lords, would we remain detached in the event of gridlock?

Lord McIntosh of Haringey: My Lords, what is the definition of "gridlock"? There has been gridlock. There was gridlock last week when 800 traffic signals went down. That is a matter for the Mayor and it should be a matter for the Mayor.

Lord Geddes: My Lords, does the Minister concur with the comments made to me recently by the chief planning officer of a major London borough that the present policy of the Mayor of London is quite deliberate; namely, to make the traffic conditions so appalling to soften up the motorist in particular for when the congestion charge is introduced? Will he also advise the House what policy Her Majesty's Government are taking regarding Members of your Lordships' House and of another place getting in to Parliament when the congestion charge is introduced?

Lord McIntosh of Haringey: My Lords, Members of Parliament will quite rightly have to pay the congestion charge like everyone else. There would be a public outcry if that were not the case. Of course I have heard the allegations about the motives behind the changes in traffic signal phasing and many other matters. However, those are not ministerial responsibilities.

Lord Addington: My Lords—

Baroness Trumpington: My Lords—

Lord Williams of Mostyn: My Lords, it is the turn of the Liberal Democrats.

Lord Addington: My Lords, does the Minister agree that all forms of devolved government must be allowed to do what their powers entitle them to do? The ultimate answer is for the electorate to remove them if they do not like what they are doing.

Lord McIntosh of Haringey: My Lords, I agree entirely with what the noble Lord, Lord Addington, says. I have always thought that governments in power were centralisers and oppositions were always decentralisers. However, now we appear to have a centralising Opposition.

Lord Rotherwick: My Lords—

Baroness Trumpington: My Lords—

Lord Williams of Mostyn: My Lords, it has to be the turn of the noble Baroness, Lady Trumpington.

Baroness Trumpington: My Lords, I realise that I take my life in my hands when I address questions on this subject to the noble Lord, Lord McIntosh. However, does he take any interest in the safe passage of emergency vehicles through the present London traffic congestion?

Lord McIntosh of Haringey: Yes, my Lords. Road safety is one of the responsibilities of government. Of course we listen carefully to the police, the Ambulance Service and the fire brigade.

Lord Strathclyde: My Lords, I have listened to the answers of the noble Lord, Lord McIntosh of Haringey, with mounting incredulity. Is it really true that the Government have turned their back entirely on the problems of traffic congestion in London with all that that means for businesses, for people who live in London and for those who come into London in order to carry out business? Can the noble Lord think of any other capital city in Europe where the central government have no interest in what happens to traffic in the capital?

Lord McIntosh of Haringey: My Lords, I cannot offhand but I am sure that there are other capital cities with decentralised arrangements. That is certainly the case in the United States and in many parts of the world. Decentralisation means what it says. It means that we devolve responsibility to regional and local government. That is an entirely proper thing which I support and have always supported.

Lord Peston: My Lords, although I entirely accept that his answers are formally correct, does my noble friend believe on reflection that when the Mayor's crackpot scheme ends in tears, as it undoubtedly will, the Government will escape censure and that the public will accept—I speak from our side of the House—the formalistic answers that we have heard today? Surely the public will say that the Mayor was initially at fault but they will add that the Government ought to have done something about the matter.

Lord McIntosh of Haringey: My Lords, if they do, they will be wrong.

Viscount Falkland: My Lords, does the Minister agree that the Government must have a view about the effects of the rephasing of traffic lights? Although it is pleasant to see pedestrians amiably wandering around at leisure there is nevertheless a great build-up of traffic, including buses and lorries, at traffic lights for considerable periods. Is it any surprise that cyclists are now going across red lights as a matter of self-preservation? They would rather risk doing that than die of asphyxiation.

Lord McIntosh of Haringey: My Lords, I am rather shocked at those comments. It sounds to me as if the noble Viscount, Lord Falkland, is condoning breaking the law. I hope that he does not intend that. The phasing of traffic lights is a matter for the Mayor of London. I shall of course ensure that the views of noble Lords are communicated to Transport for London.

Lord Brooke of Alverthorpe: My Lords, my noble friend said that these issues are sometimes discussed when the Mayor meets transport Ministers. Can we look forward to some transparency and openness with regard to those exchanges so that at least we can try to move towards a resolution of the problems?

Lord McIntosh of Haringey: My Lords, I shall communicate that view to Ministers in the Department for Transport who have contacts with the Mayor and Transport for London.

Lord Rotherwick: My Lords, are the Government happy with the handling of London's traffic by the Lord Mayor?

Lord McIntosh of Haringey: My Lords, the Lord Mayor is not responsible for traffic in London. If the noble Lord, Lord Rotherwick, meant the Mayor, various members of the Government have various views on those matters, but they are devolved.

Lord Greenway: My Lords—

Lord Williams of Mostyn: My Lords, unfortunately, we should move on.

Armoured Fighting Vehicles

Lord Burnham: asked Her Majesty's Government:
	Whether they are satisfied with the maintenance and state of readiness of the Army's armoured fighting vehicles (AFVs) for action in Afghanistan and other fields following the experience of the battlefield exercise in Oman.

Lord Bach: My Lords, the Government are satisfied that they can support and sustain the deployment of armoured fighting vehicles on all current operations. The lessons learnt as a result of Saif Sareea in Oman are being taken into account in operational planning.

Lord Burnham: My Lords, I thank the noble Lord for that Answer. In view of the fact that this is the last Question before the Summer Recess, he can consider himself jolly lucky that I withdrew my original Question on the Army's rifle. Is it not the case that about 25 per cent of Challenger tanks are currently out of action, as are a smaller number of Warriors? What steps are being taken to ensure that those vehicles are fitted with filters that will enable them to fight in the troubles in Afghanistan or possibly in Iraq and other such countries?

Lord Bach: My Lords, I thank the noble Lord, who is always welcome to ask questions about rifles or anything else he pleases, and I am happy to answer such questions.
	There always will be armoured fighting vehicles that are out of action temporarily. The air filter issue was quite separate; we have debated it in your Lordships' House quite sufficiently. The noble Lord knows that we have an excellent armoured fighting vehicle fleet in this country, which is in many ways the envy of the world.

Lord Hardy of Wath: My Lords, will my noble friend say whether the position of the British Army today is better than that in the armies of western European member states of NATO and better than it was a decade ago? Would it not be appropriate to recognise that British armoured fighting vehicles today stand in impressive comparison with international competition?

Lord Bach: My Lords, the answers to those questions are of course "Yes". We have arguably the finest armoured fleet in the world. When using highly sophisticated equipment robustly in demanding environments, as we do, there will from time to time be problems. Frankly, we have a fleet of which we can be proud. That is said not just by retired generals on television but also by those who have to use the equipment.

Lord Vivian: My Lords, while I agree with the Minister that we have the finest armoured vehicles at the moment, as at 31st March this year 64 Challenger 2 tanks were not fully operational in the six front-line operational regiments. How many are still not operational today? Has the skilled labour force been increased to avoid having 11 Challenger 2s lying idle and awaiting work? Can he explain the reason for a crane not being available for an engine lift and will he confirm that there is sufficient workshop space available to repair tanks whenever necessary? Will he confirm that sufficient major assembly spares are now held to allow for immediate repairs, so preventing long periods of delay in repairs to Challenger 2 tanks?

Lord Bach: My Lords, I can confirm, as the noble Lord said, that 64 Challenger 2s were not fully operational. Many of them could become fully operational at literally an hour's notice. The figure is not remarkably high; it was recorded at the end of March, which, I am told, is at the end of the build-up training period of the year. The tanks had been used a great deal during January, February and March. The figure is probably slightly higher than it otherwise would have been; it is not a matter of concern. I had the great pleasure of handing over the 386th Challenger to the Army. I must show the noble Lord the photographs some time.

Lord Mowbray and Stourton: My Lords, will the noble Lord assure me that the Royal Electrical and Mechanical Engineers is able to recruit and is getting the numbers required in that unit?

Lord Bach: My Lords, I cannot tell the noble Lord the answer to his precise question on recruitment, but recruitment generally in the Army is good at the moment. I shall inquire into the situation regarding REME and write to him.

Lord Roper: My Lords, reverting to the original Question, which was about the
	"experience of the battlefield exercise in Oman", and the lessons learnt, do the Government intend to publish details of the lessons learnt from that exercise and the subsequent operations in Afghanistan?

Lord Bach: My Lords, the Ministry of Defence has published quite a lot recently and I should not want to bore noble Lords or members of the general public with excess reading matter. To give a more serious answer to the noble Lord's question, I shall inquire into whether we intend to publish anything. I do not believe that it is our intention to publish anything on Oman in particular but our attitude has been shown by various Answers in this House and in the other place.

Lord Elton: My Lords, is the noble Lord aware that I have been sitting here trying very hard to be reassured by his comments? The fact that between 20 and 25 per cent or our main battle tank capacity is out of action during peacetime makes me wonder what things would be like in wartime.

Lord Bach: My Lords, I am sure that the noble Lord knows better than his question implies. The fact is that all armoured fighting vehicles are from time to time out of action because they need either major or—in most cases—minor repair. If they were needed, they could be put into operation very quickly. The noble Lord should be reassured, as I said. No one has gainsaid the fact that we have an excellent armoured fighting vehicle fleet in this country.

Financial Assistance to Opposition Parties

Lord Williams of Mostyn: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That, in the opinion of this House, the provisions of this Resolution should have effect—
	(a) in place of the Resolution of 27th November 1996 (giving of financial assistance to opposition parties in this House) in relation to the giving of such financial assistance for periods after 31st March 2002, and
	(b) in relation to the giving of financial assistance to the Convenor of the Cross-Bench Peers for periods after 31st March 2001:
	(1) Financial assistance shall be available to assist the Opposition, the second largest opposition party and the Convenor of the Cross-Bench Peers in carrying out their Parliamentary business.
	(2) The maximum amount of financial assistance which may be given is—
	(a) for the year beginning with 1st April 2002—
	Opposition..........................................£ 390,555
	second largest opposition party..........£ 195,000
	Convenor of the Cross Bench Peers.....£ 35,000
	(b) for each subsequent year, the maximum amount for the previous year increased by the percentage (if any) by which the retail prices index for the previous March has increased compared with the index for the March before that, and (if the resulting amount is not a whole number of pounds) rounded to the nearest pound.
	(3) The financial assistance available under this Resolution includes assistance in respect of expenses incurred before the passing of this Resolution.
	(4) In the case of the Convenor of the Cross-Bench Peers, financial assistance shall also be available, to a maximum of £35,000, to assist him in respect of expenses in carrying out his Parliamentary business for the year beginning with 1st April 2001.
	(5) Any claim for financial assistance by a party or the Convenor ("the claimant") is to be made to the Accounting Officer of the House; and the claimant must—
	(a) provide that Officer with a statement of the facts on which the claim is based;
	(b) certify to that Officer that the expenses in respect of which the assistance is claimed have been incurred exclusively in relation to the claimant's Parliamentary business; and
	(c) as soon as practicable after each 31st March following the passing of this Resolution, furnish that Officer with the certificate of an independent professional auditor to the effect that all expenses in respect of which the claimant claimed financial assistance during the period ending with that day were incurred as mentioned in sub-paragraph (b) above.
	(6) Paragraph (5)(c) does not apply to a claim for assistance under paragraph (4), but when making such a claim the Convenor must provide the Accounting Officer of the House with the certificate of an independent professional auditor to the effect that all expenses in respect of which the claim is made were incurred exclusively in relation to the Convenor's Parliamentary business.
	(7) In the case of any year in which there is a General Election—
	(a) the period ending immediately before the date of the Election and the period beginning with that date are to be treated as separate periods;
	(b) the maximum amount which may be given to each claimant for each of those periods is a proportionate part (rounded to the nearest pound) of the maximum amount for the year in question; and
	(c) in relation to the first such period, paragraph (5)(c) has effect as if references to the last day of the period were substituted for references to 31st March.
	(8) In this Resolution—
	(a) the "Opposition" means the party in opposition to Her Majesty's Government having the greatest numerical strength in the House of Commons;
	(b) the "second largest opposition party" means the party in opposition to Her Majesty's Government (other than the Opposition) with the greatest number of Members of this House among its members;
	(c) the "retail prices index" means the general index of retail prices (for all items) published by the Office for National Statistics (or any index or figures published by that Office in place of that index); and
	(d) "year" means a year beginning with 1st April.—[Lord Williams of Mostyn.]

Lord Barnett: My Lords, I find it not exceptionally surprising that this lengthy Motion should appear on the Order Paper on the last day of the Session. I do not suppose that there is anything exceptional about that. I have a few questions for my noble and learned friend.
	First, on the additional amount of money—it is quite a substantial sum—how was the sum of £390,555 calculated? On what basis was it decided? It would be interesting to know how the money is planned to be spent by the official Opposition and the Convenor. We are given very broad terms in relation to the way in which they will spend it. It includes,
	"assistance in respect of expenses incurred before the passing of this Resolution".
	Can any of this substantial sum of money be paid to Members of your Lordships' House on the Opposition or Cross Benches?
	Secondly, there is the whole question of how an expenditure becomes valid. That is not entirely clear in the Resolution. The "Accounting Officer" will decide; I assume that that means the new chief executive, who is an excellent Clerk of the Parliaments. I am not sure whether he will be able to define what exactly valid expenditure is or, in the case of the Convenor, for example, whether expenditure dating from more than a year ago—1st April 2001—is valid expenditure. Perhaps the Convenor or an assistant will tell us how that money has been spent, which would establish whether it was valid expenditure.
	Those are my modest few questions. I hope that my noble and learned friend will answer them in his usual manner.

Lord Williams of Mostyn: My Lords, the modest answer to those modest questions is to be found in the Resolution. My noble friend Lord Barnett will notice in subparagraph (5) that:
	"Any claim for financial assistance by a party or the Convenor"—
	called, amusingly, "the claimant"—
	"is to be made to the Accounting Officer of the House".
	All of the detail is set out there. It is a matter for each claimant for this form of social security to make out the case to the accounting officer. There is nothing new about that. So far as I understand it, the system is exactly the same as that which presently obtains.
	In respect of the figure of £390,555, the noble Lord, Lord Strathclyde, made a reasoned case in terms of research, secretarial assistance, IT and so on, which was carefully negotiated with the noble Lord, Lord Carter. Some pruning was done and a mutually agreeable and acceptable figure was arrived at. I stress that there is nothing new about this, apart from the extraordinary generosity of the Treasury and the Government on this occasion.

Lord Peyton of Yeovil: My Lords, as someone who has more usually been friendly towards the opposition than towards government, I want to express some measure of gratitude for the support given to my noble friends on my Front Bench, who are always very kind to me. I believe that they need some help in order to enable them to compete with the huge resources available to modern governments. That is the point.
	I want to ask one question which relates to my anxiety about the future. I have always been able to keep my enthusiasm for political parties under very strict control. I have even come to believe—I have said this in your Lordships' House previously—that political parties are the only thoroughly nasty thing of which one needs to have more than one. Therefore, my fear on this occasion is that this munificence may now make life easier for the Government to promote some wider measure of help to all political parties, in which case, I should be very uncomfortable.

Lord Williams of Mostyn: My Lords, I certainly agree with the noble Lord, Lord Peyton, when he says that the Conservatives need some help. But I can limit myself only to financial assistance. What we are trying to achieve at present is part of the wider context of making this House more effective. It is legitimate for the Cross-Bench Peers, the Liberal Democrats and the Conservatives to claim that they need to be adequately resourced. As to any further suspicions that the noble Lord has on a continuing basis, I must say that I am deeply shocked.

Viscount Tenby: My Lords, in the unavoidable absence on official business of my noble and gallant friend the Convenor, and in answer to what has been said this morning, perhaps I may say that it is nothing new. What is new is that we have any money at all on the Cross Benches. After battering at the gates of the Treasury for about five years, we have now been given a sum of money. I would not be as ungenerous as to say that it is a widow's mite because we are grateful for anything—any crumbs that fall from the table of the main parties in this House. Really we are scavengers, simply existing on what we can get and trying to do our best with it.
	But we must have some money to enable us to function at all. We do not have, as do the other parties—I make no complaint about this—vast armies of researchers from the party organisation. Therefore, we have been very grateful to have a certain sum of money which enables us to employ an extremely able research assistant, who is able to inform us about matters under discussion in this House. I should like to record my thanks.

Lord Williams of Mostyn: My Lords, at present the Cross-Benchers have about £21,000 a year. The proposal is that that should increase to £35,000 a year, backdated to 1st April 2001. I stand amazed at our generosity.

Lord Graham of Edmonton: My Lords, the Government and the Leader of the House should be congratulated on the proposal before us. When the governing party was in opposition, there was no such thing as Cranborne money. Cranborne is the son of Short. When Labour were in government in the other place, Ted Short—now the noble Lord, Lord Glenamara—initiated the Short money principle. That principle arose in response to the fact that the governing party had a wide range of support from Whitehall but the opposition parties had none. In opposition, Labour had to rely in the House of Lords on obtaining, and pleading for, a small amount of Short money from the other place.
	It is to the everlasting credit of the noble Viscount, Lord Cranborne, that, within a year of what I assume he knew would be a change on the Benches, he proposed Cranborne money. The first amount to be allotted was £60,000 a year, and £30,000 was made available for one half-year. After five years, the case for a five-fold increase has been made by the Leader of the House and accepted by the Treasury. I do not consider that to be over-generous because the money needs to be spent and it needs to be validated. I do not want to feel that any shortcomings of the Opposition in this House are due to a shortage of cash; they are due to other reasons.

Lord Williams of Mostyn: My Lords, yes.

On Question, Motion agreed to.

Copyright (Visually Impaired Persons) Bill

Lord Morris of Manchester: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
	Moved, That the order of commitment be discharged.—(Lord Morris of Manchester.)

On Question, Motion agreed to.

Enterprise Bill

Lord Sainsbury of Turville: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
	Moved, That the House do now again resolve itself into Committee.—(Lord Sainsbury of Turville.)

On Question, Motion agreed to.
	House in Committee accordingly.
	[The CHAIRMAN OF COMMITTEES (Lord Tordoff) in the Chair.]
	Clauses 249 and 250 agreed to.
	Clause 251 [Application of law about company arrangement or administration to non-company]:

Lord McIntosh of Haringey: moved Amendment No. 361:
	Page 177, line 26, at end insert—
	"( ) An order under this section may not provide for a company arrangement or administration provision to apply in relation to a society which is registered as a social landlord under Part I of the Housing Act 1996 (c. 52) or under Part 3 of the Housing (Scotland) Act 2001 (asp 10)."

Lord McIntosh of Haringey: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.
	Clause 251, as amended, agreed to.
	Clause 252 [Duration of bankruptcy]:

The Chairman of Committees: I have to advise the Committee that there is a mistake in the printing of Amendment No. 362. It should read, "Page 178, line 3" and not "line 2". I should also point out that, were Amendment No. 364, which is grouped with Amendment No. 362, to be agreed to, I should not be able to call Amendment No. 365 because of pre-emption.

Lord Kingsland: moved Amendment No. 362:
	Page 178, line 2, leave out "one year" and insert—
	"(a) one year in the case of a business bankrupt;
	(b) two years where a certificate for the summary administration of the bankrupt's estate has been issued and is not revoked before the bankrupt's discharge; or
	(c) three years in any other case"

Lord Kingsland: As currently drafted, there would be an automatic right to discharge and release on or within 12 months, as compared with the current period of three years; that is, the period would be 12 months unless a notice was filed by the official receiver under this clause to discharge the bankrupt at an earlier date. Therefore, there is no minimum period. A bankrupt could be discharged within a few months or even a few weeks.
	The reduced period is intended to make bankruptcy a more attractive option for entrepreneurs. But it will, of course, also make it a more attractive option for consumers. Yet it is hard to see how an increase in consumer bankruptcies can be good for business. Business will be damaged if more consumers fail to pay.
	Evidence from other jurisdictions suggests that relaxing bankruptcy laws prompts a significant rise in the number of consumer bankrupts. For example, in the United States more than 97 per cent of the 1.5 million bankruptcies in 2001 were consumer bankruptcies. Also, in Hong Kong in 1997, the year before its insolvency law changed, there were 639 bankruptcy orders, 33 initiated by the debtor and 606 by the creditor. By contrast, in the year 2001 there were 9,151 orders, 7,389 being initiated by the debtor and 1,762 by the creditor. There are similar examples in Scotland.
	As the numbers rise, so the pressure on the system rises. As demand outstrips resource, rubber-stamping creeps in and the system begins to spiral out of control. That is the risk that we face if the discharge period for consumers becomes so short that it loses all deterrent effect. And that is what lies behind the amendments that we have tabled in this group.
	Amendment No. 362 confines the reduced bankruptcy period and the early discharge provision to business bankrupts alone. It does so by introducing a simple self-certification test for business bankrupts based on the following model. First, the debtor states on the bankruptcy application form whether he is in business; and making a false or misleading statement in that context would be an offence.
	Secondly, creditors have a right to challenge the debtor's statement. Most would be able to do so on the basis of information on their own customer databases. Thirdly, if so challenged, the debtor must produce evidence that he was in business. Even those who have not kept formal accounts should be able to do so by producing, for example, an appointment book or purchase receipts or a tax return.
	On that basis, there is no need to disentangle the individual debts. Anyone would benefit from the shorter discharge period whether or not they had consumer debts; but the credit industry would have the important safeguard of being able to challenge those applicants whom it believes are not genuinely running a business. In that way, those seeking to abuse the system to the detriment of industry and other consumers could be deterred. I beg to move.

Lord Freeman: I support my noble friend's amendment and I shall speak to Amendment No. 364 standing in my name. The principle of a national set period appears desirable as long as it is not oppressive because it would set national standards and would avoid the problem of local variations. I do not believe that it would be in the public interest for those seeking discharge from a bankruptcy order to be aware that some seeking discharge were, because of constraints of resource or different procedures or different practices in different parts of the country, favoured compared with those in other parts of the country. That is not good administrative procedure and it would not encourage the efforts of those who get into financial difficulties to avoid the ultimate which is a bankruptcy order.
	My amendment sets a one-year period, which I do not believe to be unreasonable, bearing in mind the procedures that have to be gone through, including the amount of extra work that will be necessary to seek a discharge earlier than 12 months. That issue strongly concerned the CBI and in the other place a comparable amendment was tabled at Committee stage. I hope that the Minister has had a chance to reflect on the debate in the House of Commons and that he will be able to balance the argument for a shorter set period, which is proposed under the Bill—one year as opposed to three—but will agree to remove that part of the Bill that provides for an even earlier discharge than 12 months.

Lord Sainsbury of Turville: Amendments Nos. 362, 365 and 366 seek to create a separate discharge period for those bankrupts who have been carrying on a business. In answer to the point made by the noble Lord, Lord Kingsland, this part of the Bill is intended not to make life easier for bankrupts, whether consumers or businesses, but to make it easier for those who have not behaved recklessly or dishonestly to make a fresh start. That is an important point.
	Amendment No. 362 was debated at length in Committee and at Report stage in the other place. It seeks to introduce a distinction for discharge purposes between what have been termed "business" and "consumer" bankrupts. I remain unconvinced of the case for drawing such a distinction. It has been suggested that such a distinction is needed because if it is not introduced there is likely to be an increase in consumer bankrupts who will seek to take advantage of what they perceive to be an easy ride.
	I find it hard to believe that consumers would react in that way. Bankruptcy is not an easy option, and in some respects our proposals make it more, not less severe. The proposals make no change to the assets that will be available to creditors on the making of the bankruptcy order nor do they shorten the period over which the bankrupt is liable to make payments out of surplus income. The proposals will make it easier for the trustee to ensure that the bankrupt makes such payments by introducing income payments agreements. Consumers who have behaved recklessly or dishonestly (including incurring debts that they knew they would be unable to pay off) would run the risk of being subject to a bankruptcy restrictions order for up to 15 years; they would suffer damage to their credit rating and have great trouble in getting credit, including mortgages in the future. I do not believe that the majority of consumers are blinkered to those very real effects as some might suggest.
	The individual insolvency proposals seek to encourage more entrepreneurs either to start up or to restart in business. However, the aim of reducing stigma should apply to the majority of bankrupts, whether in business or not, where no misconduct or criminal behaviour has been identified. People can be subject to bad luck in their personal lives. An unexpected loss of a job or the breakdown in a personal relationship often leads to financial problems. Those individuals are as entitled to a fresh start just as much as a business person. It would not be fair or equitable to subject them to a tougher regime. The thinking behind this part of the Bill is that people should not incur any less financial penalties from going bankrupt but should, where they have not behaved recklessly or dishonestly, have the opportunity more easily to make a fresh start and rebuild their lives quickly.
	The distinction suggested in the amendment is entirely artificial and in practice would be unworkable. The experience of the Official Receiver shows that those who are self-employed do not operate their personal and business affairs in conveniently separate compartments; they are often inextricably interlinked.
	The current bankruptcy regime is the same whether a bankrupt was a consumer, in business, or a mix of the two. The system that the amendment would lead to would be a radical change in a basic principle of our insolvency law, and none of the arguments produced in Committee or at Report stage in the other place supports that. I would also point out that all of the various consultations have shown a majority being in favour of a reduction in the discharge period for all bankrupts and that the proposals advocated in the amendment, which, as I have already said, would be a massive change in the way we approach individual insolvency, have not been consulted upon at all.
	The noble Lord mentioned three areas where there have been changes: Scotland, the United States and Hong Kong. There are special conditions that relate to all those cases, particularly in the case of Hong Kong where there was a change in the bankruptcy law—the first for over a century. I do not believe that one can make easy transfers from that situation to what would happen in this country. In that case the discharge procedure was so difficult and cumbersome that in the period from 1983 to 1992, while there were about 2,600 bankruptcies, only 25 bankrupts were discharged. The circumstances are quite different.
	Amendment No. 365 is, by its nature, consequential to Amendment No. 362 as it seeks to apply early discharge provisions solely to business bankrupts.
	Amendment No. 366 seeks to define a business bankrupt as someone who files a statement in court to that effect prior to being made bankrupt, and would make it a criminal offence to do so falsely. The motivation for doing so would, presumably, be to secure a shorter period of bankruptcy, because the set of amendments dealing with this issue require that discharge for non-business debtors be either two or three years, depending on the size of the debts incurred. The practical difficulties involved in making such a distinction between business and non-business bankrupts have already been rehearsed, both here and in the other place. If Amendments Nos. 362 and 365 were not accepted the amendment would fall as a matter of course.
	A system as envisaged by these amendments would be ripe for abuse. It would seem to be enough for an individual to carry on business for one day prior to the petition. That cannot be right. It is not clear who, other than the courts, would act as arbiter in the many cases of dispute that would undoubtedly arise. This would therefore lead to further costs in the bankruptcy process, unnecessary delays and could potentially have a huge impact on the workload of the courts.
	Amendment No. 363 seeks to replace the proposed one-year discharge period with one of two years. As I said earlier, the aims of the one-year discharge period are to reduce the stigma of bankruptcy, to enable those who have failed through no fault of their own to get a fresh start and to encourage entrepreneurs to start up, or restart, in business.
	There was wide support for the one-year discharge period in responses to the White Paper Insolvency: A Second Chance. This period was arrived at after reacting to concerns raised as a response to the proposals in the Bankruptcy—A Fresh Start consultation that the then proposed six-month discharge period was too short. A widespread view taken by the respondents to the earlier consultation was that a one-year period for all bankrupts was acceptable.
	Concerns have been raised that a year will not give the Official Receiver sufficient time to investigate cases. I think that that was the point being made by the noble Lord, Lord Freeman. Those concerns are ill-founded. All bankrupts will be interviewed. In the vast majority of cases the administrative work involved in a bankruptcy will have been completed well within the 12-month period being proposed, with most assets being identified within the first month or so. The realisation of those assets is not affected by discharge, whatever the discharge period. If a bankrupt does not co-operate, then a suspension of the bankrupt's discharge can be applied for. In fact, the proposals make it easier to apply for the suspension of discharge by allowing the trustee to make an application direct rather than having to ask the Official Receiver to do so.
	Some are concerned that in reducing the discharge period, bankruptcy becomes a soft option. I fail to see how that conclusion can be drawn. I shall reiterate what I said earlier. Bankruptcy is, and will remain, the last option for those in financial trouble. To enter bankruptcy risks the loss of the bankrupt's home, the loss of virtually all his assets, substantial payments from future income for up to three years and real disadvantage in his financial affairs in the future, such as damage to credit ratings and problems in obtaining mortgages.
	We recognise that there will be a minority who seek to abuse the system. The Bill puts in place bankruptcy restrictions orders to deal with those cases. Bankruptcy restrictions orders will have the effect of extending the period for which bankruptcy restrictions apply for up to 15 years. Criminal sanctions will also be available for the most serious cases.
	The new proposals will not make bankruptcy an easier option. Reduction of the discharge period to one year will not reduce the assets that will vest in the estate or change the responsibility of bankrupts to provide information about their affairs and to give up their assets for the benefit of creditors.
	I shall now turn to Amendment No. 364, which seeks to ensure that all bankrupts will remain undischarged for a minimum of one year with no facility for early discharge. It has been suggested that all bankrupts, regardless of their conduct, should have this minimum period imposed upon them and that to reduce that period would make bankruptcy too easy an option. We do not subscribe to that view. I will not repeat again the effects of being made bankrupt, but it is clear that under our proposals bankruptcy will not be painfree, and nor should it be. Our policy is to have a regime in which the period that bankrupts are subject to restrictions reflects the circumstances of the case, and to move away from the current "one size fits all" regime.
	We are not expecting all bankrupts to be discharged before the automatic 12-month period. Discharge in less than one year will only happen in straightforward cases where the bankrupt was not at fault and poses no risk to the public or commercial community, where all investigative and administrative matters have been dealt with and where he or she has co-operated fully with the Official Receiver. Prior to filing any notice for early discharge at court, the Official Receiver will notify all creditors, and any other trustee, of the intention to do so. If the creditors raise any significant matters they will be investigated to the satisfaction of the Insolvency Service, and while they are being looked at no notice will be filed.
	There is no obvious benefit in stopping those who have failed through no fault of their own getting through the process as quickly as possible. Such an approach will encourage prompt financial rehabilitation and furthermore will encourage potential entrepreneurs to restart or start up in business.
	An important point that we should not forget is that nearly all assets or potential assets are identified in the first few months of a case and that the realisation of those assets is not affected by discharge. Where people have not behaved recklessly or dishonestly, we want people to have the opportunity as soon as possible to rebuild their lives. On that basis, I ask the noble Lords and the noble Baroness to withdraw their amendment.

Lord Kingsland: I thank the noble Lord for his full reply to this line of amendments. The Minister appears to repose great confidence in the fact of the initial interview and also in the availability of a bankruptcy restrictions order.
	Under the clause, as drafted, there is little time in practice to come to a conclusion about culpability prior to filing a notice to discharge, since the Official Receiver is likely to make the decision quickly after simply one interview with the bankrupt. In fact, there is no provision in the clause for any co-operation between the Official Receiver and the trustee on the filing for the notice, even though the trustee is likely to hold information relevant to the decision-making process.
	In those circumstances, I suggest, there is no real basis on which a bankruptcy restrictions order application can be made; and, if information subsequently emerges, the bankrupt is likely to have already received his discharge. So, even though the Minister feels strongly that the Government's approach is right—even if I were to accept that—I hope that he will admit that there are some very important ingredients of detail to put into the clause to make sure that the problems that I have described are properly met.
	The noble Lord was also somewhat scornful of the statistics that I quoted. I do not know how intimately his department is in touch with events as they are unfolding in this sphere in the United States, but the impression I have is that the direction upon which the United States' authorities are now launched is, if not the opposite, certainly a very different direction to the one that we are now facing. I hope that the Minister will be able to tell me that the Government are in close touch with the United States on their own changes and developments and will keep an open mind about the reactions of consumers and businessmen across the Atlantic. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 363 to 366 not moved.]
	Clause 252 agreed to.
	Schedule 19 agreed to.
	Clause 253 agreed to.
	Schedule 20 [Schedule 4A to Insolvency Act 1986]:
	[Amendments Nos. 366A and 366B not moved.]
	Schedule 20 agreed to.
	Schedule 21 agreed to.
	Clause 254 [Investigation by official receiver]:

Lord Hunt of Wirral: moved Amendment No. 367:
	Page 179, leave out lines 8 and 9.

Lord Hunt of Wirral: We are dealing with some significant changes to bankruptcy law. The Cork report was the last major review of bankruptcy law. To quote from that report:
	"It is a basic objective of the law to support the maintenance of commercial morality and encourage the fulfilment of financial obligations. Insolvency must not be an easy solution for those who can bear with equanimity the stigma of their own failure or their responsibility for the failure of a company under their management".
	In that report, Cork described insolvency as a compact between the debtor, his creditors and society. The debtor obtains relief and is allowed to make a fresh start. In return, society expects him to account for his failure by submitting to investigation and to contribute both from assets and from future income.
	The amendment would leave out lines 8 and 9 of page 179 and would require the official receiver to investigate the conduct and affairs of all bankrupts. As drafted, the proposed new Section 289 subjects the official receiver to a duty to investigate the conduct and affairs of all bankrupts, but then, in the subsection that the amendment would remove, permits the official receiver to dispense with an investigation without any fear of challenge.
	I do not believe that those bound by a duty should have a unfettered power to release themselves from that duty. More to the point, investigation is an important part of the bankruptcy process. It serves to achieve the essential balance between the interests of the bankrupt, his creditors and society. The amendment would preserve the statutory duty to investigate.
	I reiterate the strong views advanced by my noble friend Lord Kingsland about the extent to which the Government have not thought through these substantial changes. Together with other noble Lords, my noble friend and I have met a range of organisations that have expressed serious concern about those changes—in general terms, not just about investigation but about the extent to which they will release present restrictions on personal consumer bankruptcy.
	Several points were made to us by an organisation that knows a considerable amount about this area of law—namely, MBNA Europe. I know the Maryland Bank of North America well, because I was involved in seeking to persuade the company to make a substantial investment in the United Kingdom. I was delighted when it decided to come to Chester to set up a substantial operation based there. I recall that it did so because it was enormously impressed by the talent—especially the young talent—available in and around the Chester area and in North Wales, as it sought to recruit up to 2,000 people to work for the bank. I therefore greatly respect the views that it expresses, because they are based on that range of talent advising them on issues such as this.
	MBNA posed me several questions on which I should like the Minister's assistance. The answers may be forthcoming during the recess, but they go to the heart of many of the changes proposed.
	First, have the Government estimated the expected increase in the number of personal bankruptcies as a result of the Bill's reforms? Secondly, what level of additional resources will be made available to the official receiver to cope with the reformed system? Thirdly, will the Insolvency Service's internal guidance to the official receiver's staff on the revisions to personal insolvency contained in the Bill be public and open to consultation?
	What discussions were held with the consumer credit industry in drawing up the regulatory impact assessment for the Bill, which concluded that the proposed reforms would have no cost implications for the industry? Finally, what evidence was considered from other jurisdictions when formulating the personal insolvency reforms?
	I recognise that I have strayed wide in moving the amendment, but it goes to the heart of the reforms. At present, as with compulsory liquidation, the official receiver has an obligation to investigate the conduct of the bankrupt. The contention behind the amendment is that this should continue to be mandatory in all cases. Why? Because a investigation should be conducted to justify a decision to make an application for a bankruptcy restrictions order. The report should be filed with the Secretary of State, as well as with the court, to enable a decision to be made whether to bring such an application. Without that, it is difficult—indeed, impossible—to see on what basis a proper decision can be made; nor will creditors have any confidence that their interests are being protected.
	If the number of bankruptcies significantly increases under the new system, as many believe it will, the importance of investigating each case to prevent abuse of the system is increased. That should be addressed by the provision of appropriate levels of training and resource, rather than by removing the obligation to investigate.
	I do not expect an immediate response from the Minister to my various questions—nor, indeed, to some of my more general points. Perhaps he will write to me and other noble Lords during the recess. But the whole question concerns investigation and the opt-out presently contained in lines 8 and 9 should be removed. Therefore, I beg to move.

Lord Sainsbury of Turville: The amendment would remove the official receiver's discretion whether to investigate cases where he or she sees fit not to do so. We are not working on the basis that the provisions should lead to any significant increase in consumer bankruptcies. I have given a series of reasons why that is the case. The noble Lord asked some specific questions. There will be additional resources to deal with those issues, but I shall write in detail to the noble Lord on the specific question of whom we consulted and so on. The key thing is that we are not assuming that there will be a significant increase, for the reasons that I gave.

Lord Hunt of Wirral: We should bear in mind the latest figures for consumer credit. I saw that the Consumer Credit Counselling Service now estimates that the total debt due to credit card and loan companies has risen to the record level of £140,000 million. Has the Minister considered whether, in present market conditions, there will be an increase? He says that there will not be a significant increase: what increase does he anticipate? Is he willing to make public the advice that he has received on that subject?

Lord Sainsbury of Turville: I should deal with the issue now. The noble Lord has the wrong view of where, as a whole, consumer bankruptcies come from. They do not tend to stem from the availability of easy credit; they stem from situations of relationship breakdown, reduced income, unemployment or ill health. If we examine the mortgage figures, we can see that financial mismanagement accounts for 23 per cent, but over-indebtedness itself was only 6 or 7 per cent. The assumption that consumer bankruptcies happen because people get heavily in debt through frivolous consumer purchases is a misunderstanding of the situation. In my letter to the noble Lord, I will include the information that we have on that matter.
	The concept of giving the official receiver discretion to investigate is not new. It has been with us since the Insolvency Act 1986. That Act gives the official receiver discretion to investigate cases in which the unsecured liabilities are less than £20,000. Such cases are known as summary bankruptcies. That accounts for a large proportion of cases—about 25 per cent for the year ended 31st May 2002—but leaves a mandatory duty of investigation for all others not falling within that category. The exercise of that discretion has not, as far as I am aware, caused any great consternation in the past 16 years among creditors or other interest groups.
	The Bill will remove the provisions relating to summary bankruptcy and introduce instead a general discretion to investigate, so that resources can be used more effectively. Each case will be considered on its merits and on the basis of the facts, rather than being subject to the application of some arbitrary financial criterion, such as the level of unsecured debt. Just as there are some large cases that do not merit investigation, there are some small ones that do.
	The amendment would require the official receiver to conduct a full investigation into all cases, without regard to the facts and circumstances of individual cases. That would go further than the current situation. There may be concerns that, if we make the duty to investigate discretionary, some misconduct or criminal offences will slip through the net. In fact, there will be little change to the way in which bankruptcies are dealt with. Although the official receiver will interview all bankrupts, only then will he or she decide whether further investigation is appropriate. Furthermore, creditors will continue to be given a report of the case after a few months, when they will be asked to bring to the official receiver's attention any matters that, in their view, warrant further investigation.
	The Bill will allow for the proper targeting of investigative resources on cases that warrant it, whereas the amendment would remove the limited flexibility currently available to the official receiver. In the light of that explanation, I ask the noble Lord to withdraw the amendment.

Lord Hunt of Wirral: The Minister must be aware, from my initial remarks, that I still have considerable concerns about the reforms. I am grateful to him for kindly agreeing to let me have the further information that I requested. I shall reflect on what he said and on what he writes to me and consider whether we should return to the subject. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 254 agreed to.
	Clause 255 [Income payments order]:

Lord Hunt of Wirral: moved Amendment No. 368:
	Page 179, line 25, after "trustee" insert "or by a creditor"

Lord Hunt of Wirral: The amendment would add words that would mean that subsection (1A) of Section 310 of the Insolvency Act 1986 would read as follows:
	"An income payments order may be made only on an application instituted—
	(a) by the trustee or by a creditor, and
	(b) before the discharge of the bankrupt".
	The amendment would enable a creditor to apply for an income payments order. As drafted, the Bill allows only the trustee so to apply; creditors have no say in the matter.
	The Minister should consider a situation in which an order would be appropriate but the trustee decided not to apply, perhaps because he lacked the necessary time or funding. Creditors would be unable to challenge that decision, and the bankrupt would avoid his liability to make a proper contribution towards paying off his debts. The amendment would allow creditors to protect their position by making an application for an income payments order.
	Amendment No. 369 is also in this group, and my noble friend Lord Freeman will speak to it in a moment. It relates to the period for which income payments orders should last. It is felt that there should be no limit to the length of time for which an income payments order or agreement may last. I welcome the fact that my noble friend seeks to amend the Bill in the way suggested.
	Amendments Nos. 371, 372 and 372A are also in the group. They would ensure that the court or the trustee, with the agreement of the bankrupt, would be in the best position to consider on a case-by-case basis whether the period should be more or less than three years. I hope that the Minister will accept that this is particularly pertinent to cases in which the debtor is considered culpable for the bankruptcy and has sufficient ongoing income to make a more significant contribution to the bankruptcy fund.
	I hope that the Minister will accept the amendments. I beg to move.

Lord Freeman: I shall speak to Amendment No. 369 and support the amendments tabled by my noble friend Lord Hunt of Wirral.
	In the minority of cases of bankruptcy in which a trustee is acting, he is permitted by the Bill—and by present law—to apply for an income payments order that can last for up to three years, but only before the discharge of the bankrupt. The Minister referred to the fact that the three-year period was a valuable source of protection for creditors and could run beyond the point at which the bankrupt was discharged. The Minister is right about that.
	We have now moved on through the Bill, and I have withdrawn the amendment that would have deleted the ability to discharge a bankrupt earlier than the 12-month minimum period, if it had been judged that that was appropriate. There is, therefore, a limitation on the trustee. He might have to get his skates on, to ensure that creditors are protected. The amendment would mean that the three-year period in which the income payments order will apply would run from a point no later than 12 months after the commencement of the bankruptcy, irrespective of whether the bankrupt had been discharged before 12 months. The trustee would be able to apply for the order during that period. That seems a modest minor addition in terms of protecting the creditors. It does not drive a coach and horses through the Minister's argument, which is that some flexibility is required and where it is appropriate to discharge bankruptcy earlier than 12 months, we should be as fair, reasonable and encouraging as possible.

Lord Sainsbury of Turville: Amendment No. 368 would enable creditors to make an application to the court for an income payments order in addition to the trustee. The amendment needs to be considered carefully; it is rather dangerous. The whole point of bankruptcy is that a trustee is appointed to investigate and take control of a bankrupt's affairs on behalf of the creditors. The trustee has a duty to act in the best interests of the creditors at all times.
	I can understand that a creditor may wish to ensure that a bankrupt pays what he can out of surplus income, but it is not clear how such unilateral action would be of benefit. Indeed it is likely that costs will increase if the trustee or bankrupt defends the application. The Official Receiver or trustee will be in the best position to assess the bankrupt's ability to make contributions, as they will have an overview of the bankrupt's circumstances. If creditors are in possession of information that indicates that the bankrupt is underpaying, the proper action is for the creditor to inform the trustee who can then utilise the proposals that allow for the variation of an existing income payments order or income payments agreement.
	Creditors are able to exercise control over the trustee's actions in two ways. First, a creditors' committee can be appointed under Section 301 of the Insolvency Act 1986 to supervise the trustee. Secondly, if a creditor is unhappy about any act or omission of the trustee, an application can be made under Section 303 of the Insolvency Act for the court to review those acts or omissions. That would include the failure to apply for or vary an income payments order or agreement.
	Allowing a creditor to apply independently will be bound to increase costs through fruitless court hearings, because it is unlikely that the creditor will have all the facts at his disposal; the effect of which may be to reduce money available for distribution. It should also be remembered that the income payments agreement regime has been introduced to avoid unnecessary applications to the court, and that generally both income payments orders and agreements will run beyond discharge and for a full three years, in most cases leading to improved returns to creditors.
	Amendment No. 369 is similar to one tabled in Committee in the other place. It seeks to extend the period in which an income payments order application can be made to applications made within 12 months of the bankruptcy order even if the bankrupt has been discharged in the meantime. The administration of a bankruptcy case by the Official Receiver usually enables a case to be assessed for a possible income payments order at an early stage. The provisions introducing income payments agreements will speed up the process still further by avoiding the need for a court application.
	Where information has not been made available to the Official Receiver through non-cooperation by the bankrupt, it is possible to suspend discharge until the necessary information has been delivered. That means that, effectively, the time in which an income payments order or agreement can be entered into is also extended and the situation that the amendment seeks to address will not arise.
	The Government said in Committee in the other place that there was no need to extend the time available for income payments order applications except where absolutely necessary. As I said earlier, in the vast majority of cases bankrupts will inform the Official Receiver or trustee of their surplus income at an early stage. That will allow ample time to enter into an income payments agreement or obtain an income payments order.
	The amendment is aimed at those cases where the bankrupt receives the benefit of early discharge. Such cases are likely to be in the minority and will arise only where all administrative matters, including income payments order decisions, are fully dealt with. If creditors have proof that the bankrupt has mislead the Official Receiver about his level of surplus income, then upon receiving notification that the Official Receiver intends to file an early discharge notice, that proof should be communicated to the Official Receiver to allow the matter to be investigated prior to any early discharge notice being filed. We are of the view that there are adequate safeguards within the proposed system and that the amendment is unnecessary.
	Amendments Nos. 370 and 372 would remove the three-year limit on income payments orders and agreements. By placing a three-year limit on their duration the proposals provide a fair balance between the interests of creditors and the rehabilitation of the individual concerned. We fully recognise that it must be right that those bankrupts who can make contributions from their income should be required to do so. Indeed we wish to make it easier to achieve that aim by introducing an out of court alternative in the form of income payments agreements.
	To make the maximum period for which income payments orders and agreements could be made open-ended, as would happen if the amendments were accepted, would impose a more stringent system than already exists. That would not, in our view, be either fair or consistent with the overall thrust of the proposals in the Bill.
	Amendment No. 371 seeks to ensure that the same terms are used in referring to the contributions from a bankrupt's income made under an income payments agreement irrespective of whether they are made direct by the bankrupt, or from a third party, such as the bankrupt's employer. While that has attractions at first sight, it would be wrong to do so. Clause 256 introduces new Section 310A into the Insolvency Act 1986 dealing with income payments agreements. Paragraph (1)(a) says that an income payments agreement might provide for a proportion or part of the bankrupt's income to be paid to the trustee or Official Receiver, whereas paragraph (1)(b) provides only that a proportion of a money due to the bankrupt by way of income be paid to the trustee or Official Receiver by a third party.
	The reason for the distinction in the current drafting is that paragraph (1)(a) deals with the whole of the bankrupt's income from whatever source and allows the bankrupt to agree to designate either a proportion of his income or a specific part of it. Paragraph (1)(b) deals only with money due to the bankrupt from a third party; for example, salary from employment. In that instance it is enough to allow the agreement to specify a proportion of it. On the basis of that explanation I ask the noble Lord to withdraw his amendment.

Lord Hunt of Wirral: I am disappointed by certain aspects of the Minister's response, but I recognise that he has given a full answer to each of the amendments. I would like to take time to consider his response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 369 and 370 not moved.]
	Clause 255 agreed to.
	Clause 256 [Income payments agreement]:
	[Amendments Nos. 371 to 372A not moved.]
	Clause 256 agreed to.
	Clause 257 [Bankrupt's home]:

Lord Freeman: moved Amendment No. 373:
	Page 181, line 4, leave out "bankrupt's"

Lord Freeman: In moving the amendment I shall speak also to Amendments Nos. 374 to 378. In shorthand, this is the deserted spouse's protection charter—to give it some kind of headline and feeling. It deals with joint homes. Perhaps I may refresh the Committee's memory. If the bankrupt at the point of discharge was living in the joint home with his spouse, the Bill contains a provision whereby the trustee has a period limited to three years to deal with the sale of the property.
	The Minister will recall that in the early 1990s there was a period of negative equity. In such circumstances, without the three-year rule there has been a temptation on the trustee's part to defer dealing with the matter until the negative equity has been erased and there is some value in selling the home.
	I commend the protection in the Bill—it must be right—but there is a lacuna. It is that if at the time of discharge the bankrupt had left, leaving, as I will call him or her, the "deserted spouse", the three-year protection period does not apply. It is a small point, but it is wrong to leave a sword of Damocles over the head of, say, a deserted wife in a house not knowing what the position may be. Unfortunately, no one is offering complete protection about the sale of the house, but if after three years the trustee has not taken action the matter will be resolved. I beg to move.

Lord Kingsland: Our Amendment No. 379 is part of this group and I shall speak to it briefly. Clause 57 inserts a new Section 283A into the Insolvency Act 1986, which provides for a bankrupt's interest in a dwelling house, his sole or principal residence, to vest automatically in the bankrupt after three years beginning with the date of his bankruptcy.
	There are a number of exceptions to the automatic vesting, one of which is that the period of three years does not begin if the bankrupt fails to inform the trustee or the official receiver of his interest in the property before the end of the period of three months, beginning with the date of bankruptcy. If he fails to so inform, the period of three years begins with the date on which the trustee or the official receiver becomes aware of the bankrupt's interests. We believe that that is an important exception because it will discourage bankrupts from concealing any interest in their sole or principal residence.

Lord Sainsbury of Turville: I shall first address Amendments Nos. 373 to 378. Taken together, they would extend the effect of the new provisions for dealing with the family home to include any interest that the bankrupt has in the sole or principal residence of his or her spouse or former spouse.
	Section 313 of the Insolvency Act 1986 deals with the trustee's right to apply for a charge on the bankrupt's interest in a dwelling house occupied by the bankrupt, or his or her spouse or former spouse. That section is intended to ensure that a spouse or former spouse and the children are afforded protection from the disposal of a property by the trustee in bankruptcy without also considering the welfare of the bankrupt's family.
	The amendment seeks to secure in what is likely to be a small number of cases similar protection to spouses and former spouses. Section 336 of the Insolvency Act 1986 effectively gives a spouse or former spouse the right to occupy the former family home for a minimum of one year after it is vested in the trustee in bankruptcy. It sets out that for the period of one year after vesting the interest of the spouse or former spouse takes precedence over the interests of the creditors and during that period the trustees cannot take steps to realise the bankrupt's interest in that home. After one year, the creditor's interest is deemed to outweigh that of the spouse or former spouse and the bankrupt's interests can be realised. I have listened to the comments made and should like to consider this matter further with a view to tabling a suitable amendment at Report stage.
	I now speak to Amendment No. 379, which seeks to mirror the safeguard against a bankrupt's non-disclosure of interest in a property currently provided for in subsection (5) of new Section 283A. Generally, the trustee will have three years from the date of bankruptcy to deal with a bankrupt's interest in the family home. If a bankrupt fails to disclose that interest and it did not come to light until more than three years after bankruptcy, without the safeguard a potential asset would be lost to the estate. The safeguard makes it clear that in case of non-disclosure the three-year period does not start running until the trustee becomes aware of the bankrupt's interest.
	The amendment seeks to insert a similar safeguard against non-disclosure in the transitional provisions for pre-commencement bankrupts. The amendment clearly has merit and I am grateful that it has been tabled. I should like time to consider it further to ensure that it does what it sets out to do, with a view to bringing a government amendment at the Report stage. I hope that on that basis the noble Lord will withdraw his amendment.

Lord Kingsland: Before my noble friend Lord Freeman speaks, I should like to thank the noble Lord for his response to my amendment.

Lord Freeman: I share my noble friend's view and I thank the Minister for accepting the principle of Amendment No. 373. That is much appreciated. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 374 to 379 not moved.]
	Clause 257 agreed to.
	Clauses 258 to 260 agreed to.
	Schedule 22 [Individual voluntary arrangement]:

Lord Kingsland: moved Amendment No. 380:
	Page 314, leave out lines 25 to 29 and insert—
	"(1) This section applies where the creditors meeting summoned under section 257 approves the proposed voluntary arrangement (with or without modifications) whether or not the bankrupt is discharged."

Lord Kingsland: Under Section 261 of the Insolvency Act 1986, the court can annul a bankruptcy order if a voluntary arrangement is approved. However, the court has jurisdiction to do so only in those circumstances if the debtor is an undischarged bankrupt. Curiously, it has no jurisdiction to annul the bankruptcy after the bankruptcy order is discharged.
	In practice, this causes problems because many bankrupts, particularly professionals, are interested only in an annulment rather than a discharge. There is therefore less incentive for those bankrupts to oppose a voluntary arrangement. The problem will become more acute after the Bill comes into force because there will be an automatic discharge after a year. A bankrupt will have only a year to obtain the approval of the voluntary arrangement, and that is far too short a period. We feel that a bankrupt, even though the bankruptcy order has been discharged, should be entitled to have the order annulled if his creditors approve a voluntary arrangement. I beg to move.

Lord Freeman: I want to speak to Amendments Nos. 382 and 383 and to support my noble friend's Amendments Nos. 380 and 381. The purpose of Amendment No. 382 is to give the creditors a say in whatever is proposed for the voluntary arrangement. Voluntary arrangements are to be welcomed because they provide an earlier opportunity to conclude what can be an unfortunate period for someone who has suffered financial difficulty. Each year there are about 22,000 to 23,000 bankruptcies and about 6,000 to 7,000 voluntary arrangements. Therefore, voluntary arrangements are important and I believe that the creditors should be given a chance to comment on and approve what is proposed for that arrangement.

Lord Sainsbury of Turville: Amendment No. 380 seeks to amend the new version of Section 261 of the Insolvency Act 1986 introduced by the Bill.
	The issue at stake is whether or not bankrupts who have been discharged should be able to obtain an individual voluntary arrangement. Currently, undischarged bankrupts generally have three years to make an application for an individual voluntary arrangement. The Bill will reduce the automatic discharge period to one year. Consequently, there may be a small number of cases where a bankrupt reaches a position where he or she is financially able to enter into an individual voluntary arrangement but is unable to do so because he or she is discharged from bankruptcy. Section 281 of the Insolvency Act sets out that the effect of discharge is that bankrupts are released from their debts.
	Since the Insolvency Act was introduced in 1986, discharged bankrupts have not been able to enter an individual voluntary arrangement and we have no wish to modify that position just because the discharge date will now be earlier than it is at present.
	I accept that there may be a very small number of discharged bankrupts who might wish to enter into an individual voluntary arrangement because that would lead to an annulment. However, most who wish to do so will be able to go down that route prior to discharge since the reasons for entering the individual voluntary arrangement would most likely be in existence at the time of the bankruptcy order. In addition—I stress this point—it should be remembered that a court can, and will remain able to, annul a bankruptcy order at any time, including after discharge, on the ground that the bankruptcy order should never have been made or where the bankrupt has paid his bankruptcy debts in full. I should add that the amendment is technically deficient without a number of consequential amendments to other sections of the Insolvency Act.
	Amendment No. 381 is similar to one put down in Committee in the other place and seeks to change those who are eligible to vote on a new fast-track proposal for an individual voluntary arrangement. It does this by including creditors whose debts were incurred after the bankruptcy order but before the date that the Official Receiver makes the decision whether a bankrupt's individual voluntary arrangement proposal has a reasonable chance of success.
	Currently, the clause sets out that only those who have a bankruptcy debt can vote. If debts are incurred after the date of the bankruptcy order, the creditors concerned can petition for a further bankruptcy order to be made in respect of them. Our approach is consistent with the rules on existing individual voluntary arrangements which clearly set out that there are currently two types of individual voluntary arrangement cases.
	Rule 5.1 of the Insolvency Rules 1986 sets out that "Case 1" applies where the debtor is an undischarged bankrupt and "Case 2" where he is not. Rule 5.13, which deals with the summoning of creditors' meetings, sets out that all those who are listed by the bankrupt in his or her statement of affairs, and any other creditors of whom the nominee is aware, are entitled to notice of the meeting. Rule 5.17 sets out that the creditors in Case 1-type individual voluntary arrangements—post bankruptcy—can only vote for amounts that are due up to the date of bankruptcy. In Case 2-types, the debts can be calculated up to the date of the creditors' meeting.
	That clear delineation between the treatment of pre-bankruptcy and post-bankruptcy debts for Case 1 individual voluntary arrangements has worked successfully since the Insolvency Act 1986 introduced them. We see no justification for change. It is also worth bearing in mind that the bankruptcy order will be annulled after the agreement to the fast-track individual voluntary arrangements.
	Amendments Nos. 382, 383 and 384 seek to change the proposed new regime for fast-track individual voluntary arrangements by allowing creditors to suggest modifications to the proposal, such modifications not being adopted unless the debtor and the Official Receiver consent to them.
	The amendments would increase significantly the complexity and, therefore, the costs of the process and make post-bankruptcy individual voluntary arrangements less accessible. That goes against the intention behind the fast-track proposals which are intended to apply in straightforward, income-based cases and aim to increase the number of such cases. Currently, under 2 per cent of individual voluntary arrangements are entered into after bankruptcy. Generally speaking, returns to creditors are higher in individual voluntary agreements than in bankruptcy. It is therefore in the interests of both debtors and creditors to seek to increase their use.
	Amendment No. 385 is similar to one tabled in Committee in the other place. It seeks to place on the face of the Bill a requirement that the Official Receiver, as well as notifying the court of the result of the creditors' decision on whether to accept or to reject the debtor's proposal for an individual voluntary arrangement, should at the same time notify the creditors of that result.
	We feel that the amendment is unnecessary and that it is more appropriate to include such matters in rules where the mechanics of the process can be considered in their entirety. The Bill provides that the result of the creditors' vote on the new fast-track individual voluntary arrangement is reported to the court. That report will trigger an application for the annulment of the bankruptcy where the individual voluntary arrangement has been approved. While the Bill does not provide for a similar notification of creditors, we agree that it is appropriate and will place that requirement in the rules for the new fast-track individual voluntary arrangements.
	That would mirror the current individual voluntary arrangement provisions in Section 259 of the Insolvency Act, where obligations to report to the court are dealt with in primary legislation while persons who are to be notified of the results of a creditors' meeting, other than the court, are currently prescribed in Rule 5.22.
	Amendments Nos. 383 and 384 seek to omit references to Section 257, thereby removing references to the section through which the meeting is called. The remaining subsections of Section 258 make numerous references to "a meeting", as does new subsection (c) in the amendment of the proposed new subsection to Schedule 22 which, as I have already established, could not be held as the vehicle to consider modifications.
	Amendment No. 386 is similar to one tabled in Committee in the other place. It seeks to restrict the possible extension by order of the new fast-track Official Receiver individual voluntary arrangement regime to cases where the debtor concerned is not an undischarged bankrupt. While we have no present plans to use the power, insolvency is a rapidly evolving area.
	If the fast-track individual voluntary arrangement regime proves effective, we should be able to consider extending that regime to those who are not bankrupt. This power would allow us to react to any demand that may arise to extend fast-track individual voluntary arrangements to all debtors without the need for primary legislation, which may cause delay in satisfying that demand. Exercise of the power is subject to affirmative resolution, so it will be fully considered by both Houses. The new post-bankruptcy individual voluntary arrangement regime aims to get more people out of bankruptcy by putting in place a more streamlined process in straightforward cases and providing a more transparent fee regime. Currently, that transparency does not always exist. If the new regime results in fees being reduced and becoming more transparent, we see that as a good thing.
	I hope that, with those explanations, the noble Lord will feel able to withdraw his amendment.

Lord Kingsland: The proceedings so far this morning have flowed—dare I say it?—mellifluously, with an agreeable measure of pragmatism and flexibility being demonstrated on both sides of the Committee. However, I am bound to say that I find the Minister's reaction to Amendment No. 380 in sharp distinction to what has taken place so far. He is of course right to say that circumstances can arise when, after a bankruptcy order has been discharged, it can nevertheless go on to be annulled where either an order was not an order in the first place or where the bankrupt had fully discharged all the debts that he owed.
	However, the more likely set of circumstances are those that I put to the Minister in my opening speech. The noble Lord made it absolutely clear that he cannot accept them. In those circumstances, I feel compelled to test the opinion of the Committee.

On Question, Whether the said amendment (No. 380) shall be agreed to?
	Their Lordships divided: Contents, 53; Not-Contents, 102.

Resolved in the negative, and amendment disagreed to accordingly.
	[Amendments Nos. 381 to 386 not moved.]
	Schedule 22 agreed to.
	Clauses 261 to 265 agreed to.
	Schedule 23 agreed to.
	Clauses 266 to 268 agreed to.
	[Amendment No. 387 not moved.]
	Clauses 269 to 272 agreed to.
	Schedule 24 [Transitional and transitory provisions and savings]:

Lord Sainsbury of Turville: moved Amendment No. 387A:
	Page 322, line 23, at end insert—
	:TITLE3:"Merger references
	12A (1) Subject to paragraphs 12C to 12F, the old law shall continue to apply where—
	(a) two or more enterprises have ceased to be distinct enterprises (within the meaning of Part 5 of the 1973 Act); and
	(b) the cessation has occurred before the appointed day.
	(2) Subject to sub-paragraphs (3), (4) and (5) and paragraphs 12C to 12F, the old law shall continue to apply in relation to any relevant arrangements which were in progress or in contemplation before the appointed day and are in progress or in contemplation on that day and (if events so require) the actual results of those arrangements where, before the appointed day—
	(a) a merger notice was given, and not rejected under section 75B(7) of the 1973 Act or withdrawn, in relation to the arrangements;
	(b) no merger notice was so given but, in relation to the arrangements—
	(i) a reference was made under section 75 of the 1973 Act;
	(ii) undertakings were accepted under section 75G of that Act; or
	(iii) a decision was made by the Secretary of State neither to make a reference under section 75 of that Act nor to accept undertakings under section 75G of that Act; or
	(c) a merger notice was so given, was rejected under section 75B(7) of the 1973 Act or withdrawn, paragraph (a) does not apply in relation to a different merger notice given in relation to the arrangements and, in relation to the arrangements, paragraph (b)(i), (ii) or (iii) applies.
	(3) Subject to sub-paragraph (8), the new law shall, in a case of the kind mentioned in sub-paragraph (2)(a), apply in relation to any relevant arrangements and (if events so require) the actual results of those arrangements if, on or after the appointed day, a merger notice is rejected under section 75B(7) of the 1973 Act or withdrawn in relation to the arrangements.
	(4) Subject to sub-paragraph (8), the new law shall, in a case of the kind mentioned in sub-paragraph (2)(a), apply in relation to any relevant arrangements and (if events so require) the actual results of those arrangements if—
	(a) the making of a reference under section 64 or 75 of the 1973 Act in relation to those arrangements and (if events so require) the actual results of those arrangements was, immediately before the appointed day and by virtue of section 75C(1)(c), (e) or (g) of that Act, not prevented;
	(b) the period for considering the merger notice has expired (whether before, on or after the appointed day); and
	(c) no reference has been made under section 64 or 75 of the 1973 Act and no undertakings have been accepted under section 75G of that Act.
	(5) Subject to sub-paragraph (8), the new law shall, in a case of the kind mentioned in sub-paragraph (2)(a), apply in relation to any relevant arrangements and (if events so require) the actual results of those arrangements if—
	(a) the making of a reference under section 64 or 75 of the 1973 Act in relation to those arrangements and (if events so require) the actual results of those arrangements becomes, on or after the appointed day and by virtue of section 75C(1)(b), (c), (d), (e) or (g) of that Act, not prevented;
	(b) the period for considering the merger notice has expired (whether before, on or after the appointed day); and
	(c) no reference has been made under section 64 or 75 of the 1973 Act and no undertakings have been accepted under section 75G of that Act.
	(6) Subject to sub-paragraph (8), the new law shall apply in relation to relevant arrangements and (if events so require) the actual results of those arrangements if—
	(a) the arrangements were in progress or in contemplation before the appointed day and are in progress or in contemplation on that day;
	(b) before the appointed day and in relation to the arrangements—
	(i) no reference was made under section 75 of the 1973 Act;
	(ii) no undertakings were accepted under section 75G of that Act; and
	(iii) a decision neither to make a reference under section 75 of that Act nor to accept undertakings under section 75G of that Act was not made by the Secretary of State; and
	(c) no merger notice was given to the Director or the OFT before that day in relation to the arrangements.
	(7) Subject to sub-paragraph (8), the new law shall, in a case of the kind mentioned in sub-paragraph (2)(c) (excluding the words from "and" to the end), apply in relation to any relevant arrangements and (if events so require) the actual results of those arrangements if, in relation to the arrangements, sub-paragraph (2)(b)(i), (ii) and (iii) do not apply.
	(8) Subject to paragraphs 12C to 12F, the old law shall continue to apply in relation to concentrations with a Community dimension (within the meaning of the European Merger Regulations) notified before the appointed day to the European Commission under article 4 of those Regulations.
	(9) In this paragraph references to relevant arrangements which are in progress or in contemplation on the appointed day include references to the actual results of those arrangements if the arrangements were in progress or in contemplation immediately before the appointed day and have, at the beginning of the appointed day, resulted in two or more enterprises ceasing to be distinct enterprises (within the meaning of Part 5 of the 1973 Act).
	(10) In this paragraph—
	"the European Merger Regulations" has the meaning given by section 124(1);
	"merger notice" means a notice under section 75A(1) of the 1973 Act;
	"the new law" means Part 3 of this Act and any related provision of law (including, in particular, any modification made under section 272(2) to that Part or any such provision);
	"the old law" means sections 64 to 75K of the 1973 Act and any related provision of law (including, in particular, any modification made under section 272(2) to those sections or any such provision); and
	"relevant arrangements" means arrangements which might result in two or more enterprises ceasing to be distinct enterprises (within the meaning of Part 5 of the 1973 Act).
	:TITLE3:Monopoly references
	12B (1) Subject to paragraphs 12C to 12F, the old law shall continue to apply in relation to any monopoly reference made before the appointed day under section 50 or 51 of the 1973 Act.
	(2) No person has to comply on or after the appointed day with a requirement imposed before that day under section 44 of the 1973 Act.
	(3) In this paragraph—
	"monopoly reference" has the meaning given by section 5(3) of the 1973 Act; and
	"the old law" means Part 4 of the 1973 Act and any related provision of law (including, in particular, any modification made under section 272(2) to that Part or any such provision).
	:TITLE3:Enforcement undertakings and orders
	12C (1) Section 91(1) to (6) shall apply in relation to any undertaking—
	(a) accepted (whether before, on or after the appointed day) by a Minister of the Crown—
	(i) in pursuance of a proposal under section 56A of the 1973 Act; or
	(ii) under section 56F, 75G or 88 of that Act; and
	(b) of a description specified in an order made by the Secretary of State under this paragraph;
	as it applies in relation to enforcement undertakings under Part 3.
	(2) Section 91(1) to (6) shall apply in relation to any order made by a Minister of the Crown under section 56, 73, 74, 75K or 89 of the 1973 Act (whether before, on or after the appointed day) and of a description specified in an order made by the Secretary of State under this paragraph as it applies in relation to enforcement orders under Part 3.
	(3) Compliance with—
	(a) an undertaking accepted by a Minister of the Crown under section 88 of the 1973 Act (whether before, on or after the appointed day) and of a description specified in an order made by the Secretary of State under this paragraph; or
	(b) an order made by a Minister of the Crown under section 56, 73, 74 or 89 of the 1973 Act (whether before, on or after the appointed day) and of a description specified in an order made by the Secretary of State under this paragraph;
	shall also be enforceable by civil proceedings brought by the Commission for an injunction or for interdict or for any other appropriate relief or remedy.
	(4) Sub-paragraph (3) and section 91(6) as applied by virtue of sub-paragraph (1) or (2) shall not prejudice any right that a person may have by virtue of section 91(4) as so applied to bring civil proceedings for contravention or apprehended contravention of an undertaking or order.
	(5) Sections 93 and 93A of the 1973 Act shall accordingly cease to apply in relation to undertakings and orders to which sub-paragraphs (1) to (3) above apply.
	12D (1) Sub-paragraph (2) applies to any undertaking—
	(a) accepted (whether before, on or after the appointed day) by a Minister of the Crown—
	(i) in pursuance of a proposal under section 56A of the 1973 Act; or
	(ii) under section 56F, 75G or 88 of that Act; and
	(b) of a description specified in an order made by the Secretary of State under this paragraph.
	(2) An undertaking to which this sub-paragraph applies may be—
	(a) superseded by a new undertaking accepted by the relevant authority under this paragraph;
	(b) varied by an undertaking accepted by the relevant authority under this paragraph; or
	(c) released by the relevant authority.
	(3) Subject to sub-paragraph (4) and any provision made under section 272(2), the power of the relevant authority under this paragraph to supersede, vary or release an undertaking is exercisable in the same circumstances, and on the same terms and conditions, as the power of the Minister concerned to supersede, vary or release the undertaking would be exercisable under the 1973 Act.
	(4) The duty under section 75J(b) of the 1973 Act to give advice shall be a duty of the OFT to consider what action (if any) it should take.
	(5) Where the relevant authority has the power by virtue of this paragraph to supersede, vary or release an undertaking accepted by a Minister of the Crown—
	(a) in pursuance of a proposal under section 56A of the 1973 Act; or
	(b) under section 56F, 75G or 88 of that Act;
	the Minister concerned shall accordingly cease to have the power under that Act to supersede, vary or release the undertaking.
	(6) In this paragraph "the relevant authority" means—
	(a) in the case of an undertaking accepted in pursuance of a proposal under section 56A of the 1973 Act or an undertaking under section 56F or 75G of that Act, the OFT; and
	(b) in the case of an undertaking accepted under section 88 of that Act, the Commission.
	12E (1) Any order made by a Minister of the Crown under section 56, 73, 74 or 89 of the 1973 Act (whether before, on or after the appointed day) and of a description specified in an order made by the Secretary of State under this paragraph may be varied or revoked by an order made by the Commission under this paragraph.
	(2) Any order made by a Minister of the Crown under section 75K of the 1973 Act (whether before, on or after the appointed day) and of a description specified in an order made by the Secretary of State under this paragraph may be varied or revoked by an order made by the OFT under this paragraph.
	(3) Subject to sub-paragraph (4) and any provision made under section 272(2), the power of the Commission to make an order under sub-paragraph (1), and the power of the OFT to make an order under sub-paragraph (2), is exercisable in the same circumstances, and on the same terms and conditions, as the power of the Minister concerned to make a corresponding varying or revoking order under the 1973 Act would be exercisable.
	(4) The power of the Commission to make an order under sub-paragraph (1), and the power of the OFT to make an order under sub-paragraph (2), shall not be exercisable by statutory instrument and shall not be subject to the requirements of section 134(1) of the 1973 Act.
	(5) Where the Commission or the OFT has the power by virtue of this paragraph to vary or revoke an order made by a Minister of the Crown under section 56, 73, 74, 75K or 89 of the 1973 Act, the Minister concerned shall accordingly cease to have the power to do so under that Act.
	12F (1) Section 91(1) to (6) shall apply in relation to undertakings accepted under paragraph 12D and orders made under paragraph 12E as it applies in relation to enforcement undertakings and enforcement orders under Part 3.
	(2) Compliance with an undertaking accepted by the Commission under paragraph 12D or an order made by it under paragraph 12E shall also be enforceable by civil proceedings brought by the Commission for an injunction or for interdict or for any other appropriate relief or remedy.
	(3) Sub-paragraph (2) and section 91(6) as applied by virtue of sub-paragraph (1) shall not prejudice any right that a person may have by virtue of section 91(4) as so applied to bring civil proceedings for contravention or apprehended contravention of an undertaking or order.
	:TITLE3:Paragraphs 12A to 12F: supplementary provision
	12G (1) In paragraphs 12A to 12F "the appointed day" means such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed for different purposes.
	(2) An order made by the Secretary of State under paragraph 12C, 12D or 12E—
	(a) may make different provision for different purposes; and
	(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."

Lord Sainsbury of Turville: This group of government amendments is concerned with transitional and consequential matters. Members of the Committee will have received a letter setting out briefly the purpose and nature of these amendments.
	Amendment No. 387A is the one with most significance. It sets out the arrangements for the transition from the Fair Trading Act merger and monopoly regimes to the new regimes. It will, therefore, be of interest to businesses which may be planning mergers for next year. Our approach to the transition has been governed by the principle that in planning mergers, business should have certainty about whether the new or the old law will apply. This has led to the adoption of the following provisions.
	For anticipated mergers properly notified to the OFT under the merger notice procedure in Section 75A of the Fair Trading Act, the old law will continue to apply if notification took place before the day appointed for the commencement of the new law. For anticipated mergers that are not notified using the merger notice procedure, the applicable law will be the one applying when the authorities take a decision about that merger. In other words, the law applying when the merger is referred, cleared, or cleared on the basis of undertakings. For mergers completed before the appointed day, the old law will apply irrespective of the date when the merger is notified to the OFT or otherwise made public. For monopoly references, the old law will apply to all references made before the commencement of the new market investigations regime.
	The amendment also makes provision for the assignment, where appropriate, of orders and undertakings made or accepted by the Secretary of State under the old regime to the OFT or to the Competition Commission. Where such orders or undertakings are assigned, the OFT or the commission will take on responsibility for their subsequent variation or termination. Our plan is for the Secretary of State to assign those orders and undertakings which are concerned with competition. Those which are concerned with wider public interest issues will remain the responsibility of the Secretary of State.
	Amendments Nos. 389A to 389C and 389E to 389F are consequential amendments to the Telecommunications Act 1984 and the Broadcasting Act 1990. These Acts (along with other utilities Acts) contain provisions allowing the relevant regulator to refer disputed licence modifications to the Competition Commission. Such references currently rely on procedural provisions in the Fair Trading Act and the Competition Act 1998 which are being modified by the Enterprise Bill. Most of the necessary consequential amendments to these utilities Acts have already been made. These further amendments clarify some of the earlier amendments and complete the picture. They make explicit provision about the interaction between, for example, the criminal provisions and order-making powers in the Enterprise Bill which have effect for the purposes of the penalties provisions in Clauses 106 to 113 and their corresponding provision in the individual enactments.
	The amendments to the Telecommunications Act and the Broadcasting Act provide a template for consequential amendments that will be required to the other utilities Acts that are similarly affected. As I said in my letter, we plan to bring forward these further amendments on Report.
	Amendment No. 389D removes an erroneous reference to the Competition Act 1980 in one of the consequential amendments to the Airports Act.
	Amendment No. 390A brings the Competition Appeal Tribunal under the supervision of the Council on Tribunals. It replaces the current reference to the Competition Commission appeal tribunals in Schedule 1 to the Tribunal and Inquiries Act 1992. The Council on Tribunals is responsible for keeping under review the constitution and working of a wide range of tribunals. I beg to move.

On Question, amendment agreed to.
	Schedule 24, as amended, agreed to.
	Clause 273 [Power to make consequential amendments etc.]:

Lord Kingsland: moved Amendment No. 388:
	Page 190, line 8, at end insert—
	"( ) But no order made under subsection (1) may amend or alter or in any way affect Part 6."

Lord Kingsland: I can make this point very simply. The Secretary of State should not be permitted to amend or alter in any way by order the definition of the criminal offence or of any of the investigatory powers. Such changes should be subject to the full parliamentary scrutiny afforded to an amending Bill. I beg to move.

Lord Sainsbury of Turville: This amendment seeks to exclude Part 6 of the Bill—which deals with the cartel offence—from the provisions in Clause 273, under which the Secretary of State is given the power to make supplementary, incidental or consequential provisions by order.
	This clause provides the flexibility to make by delegated legislation any minor revisions to legislation that are required to ensure that the provisions of this Bill fit well with the provisions of other legislation. These powers can be used only to supplement or to make incidental or consequential provision, and for the limited purposes given in paragraph (1): for the purposes of the Bill and in consequence of, or to give effect to, its terms.
	These powers are limited in scope. It is entirely sensible and normal to include such powers in a Bill of this complexity, covering a number of policy areas.
	I can assure the Committee that these powers would not permit the wholesale rewriting of substantive parts of the Bill—neither in Part 6 nor in any other part of the Bill. They have to be looked at in context. It would not be possible to use them to make significant changes to Part 6, such as changing the definition of the offence; increasing the penalties for the offence; or reducing the protections provided for in relation to the exercise of the investigative powers in Part 6.
	But of course it is always possible that a provision made under these powers could have an effect on Part 6, and so it would be inappropriate to exclude that part from the scope of the clause. On that basis, I ask the noble Lord to withdraw his amendment.

Lord Kingsland: I am most grateful to the Minister. I am greatly reassured by his response. In those circumstances, I am content to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 389 not moved.]
	Clause 273 agreed to.
	Clause 274 agreed to.
	Schedule 25 [Minor and consequential amendments]:

Lord Sainsbury of Turville: moved Amendments Nos. 389A to 389F:
	Page 326, line 5, at end insert ";
	(b) after subsection (4) there is inserted—
	"(5) This section shall not have effect in relation to the furnishing of information to the Commission in connection with its functions under any provision of the Enterprise Act 2002 as applied by virtue of section 13B of the Telecommunications Act 1984.""
	Page 340, line 24, at end insert—
	"(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) above, have effect in relation to those sections as applied by virtue of that subsection.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.""
	Page 341, line 46, at end insert—
	"(10) In section 103 (time limits for summary proceedings)—
	(a) that section shall be renumbered as subsection (1) of that section;
	(b) after that subsection there is inserted—
	"(2) Subsection (1) above shall not apply for the purposes of an offence under any provision of the Enterprise Act 2002 as applied by virtue of section 13B above.""
	Page 342, line 7, leave out "or the 1980 Act"
	Page 350, line 27, at end insert—
	"(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of sub-paragraph (1), have effect in relation to those sections as applied by virtue of that sub-paragraph.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that sub-paragraph."
	Page 353, line 3, at end insert—
	"(4) This paragraph shall not have effect in relation to the supplying of information to the Competition Commission in connection with its functions under any provision of the Enterprise Act 2002 as applied by virtue of paragraph 4A.""
	On Question, amendments agreed to.

Lord Borrie: moved Amendment No. 390:
	Page 353, line 15, at end insert—
	"(2A) In section 12, after subsection (3) there is inserted—
	"(3A) For the purposes of subsection (3)(b)(ii) the principles there referred to shall require the Competition Commission, in re-determining any disputed price limit which a relevant undertaker had required the Director to refer to the Commission, to express separately its conclusion whether (and if so, to what extent) the application of those principles required the Commission to include in its re-determination of that price limit an allowance for all or part of the costs incurred by that relevant undertaker (after the date upon which it required the Director to refer that disputed determination for re-determination) in preparing for and pursuing its case before the Commission.""

Lord Borrie: This amendment stands in my name and that of the noble Lord, Lord Hodgson of Astley Abbotts. It has been promoted by WaterVoice, the body representing the 10 regional statutory Ofwat customer service committees. It speaks for the consumer of water services.
	Apart from mergers, the Competition Commission may be involved in the water industry if a company wishes to challenge the price limits imposed upon it by Ofwat. Customers have no equivalent right to challenge such price limits before the Competition Commission. Yet if the company exercises its right of appeal to go from Ofwat to the commission, the commission in setting new price limits may allow the company to recover all the Ofwat inquiry costs—legal costs and the rest—from customers. This happened a few years ago to the Sutton and East Surrey and the Mid Kent water companies when those companies challenged the price limits. As a result, the water bills of customers of those fairly small companies went up quite a lot to pay for the inquiry costs.
	The purpose of the amendment is to allow the Competition Commission explicit discretion when re-determining the price limits of companies to make an allowance for costs incurred by the company in preparing for and pursuing its case before the commission. That would mean that the company's shareholders, rather than its customers, could bear such costs at the commission's discretion.
	I am happy to say that Ofwat—the water regulator—wrote to me after the tabling of this amendment expressing support. Perhaps I may quote just two sentences contained in the letter to me from the Director General of Water Services, Mr Philip Fletcher:
	"I do not consider that companies' costs should always be borne by shareholders, but I do think that the allocation of costs should depend on whether the reference was reasonable. In judging this the Commission should be able to take account of the outcome of the referral and the companies' behaviour in its initial dealings with Ofwat".
	I beg to move.

Lord Sainsbury of Turville: As we have heard, this amendment is aimed at giving the Competition Commission a discretion, when it is considering a water price cap reference, about whether to allow the costs incurred by a company in arguing its case to be included in the costs that can be recovered from customers through water charges. On the basis of legal advice, the Competition Commission currently takes the view that it has to allow for such costs, unless they are unreasonable.
	I understand the issues involved here. I have some sympathy for the case outlined by the noble Lord, Lord Borrie. However, I hope that he will understand when I say that the change that he proposes is not central to the main competition objectives of the Bill. The Bill reforms the merger and monopoly regimes currently set out in the Fair Trading Act. It does not address the special regulatory regimes for the utilities, except where changes are needed as a direct consequence of the wider competition reforms. Accordingly, my department has not carried out any consultation on issues connected with the regulation of the utility statutes as part of the preparations for the Bill. Therefore, I am very keen not to extend the reach of the Bill into this new, untested area.
	I believe that the issue raised by the amendment would be better addressed in the context of reforms to utility-specific legislation when the opportunity arises. On that basis, I urge the noble Lord, Lord Borrie, to withdraw the amendment.

Lord Borrie: I am bound to express a certain disappointment with the Minister's response. While not, of course, anticipating the Queen's Speech, I had hoped that the noble Lord would have mentioned the projected water Bill that departments have in mind. I am sorry that the noble Lord did not even mention it. Nevertheless, I shall consult with my advisers and consider whether or not I wish to pursue the matter further on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sainsbury of Turville: Amendment No. 390A:
	Page 354, line 22, after "2" insert "—
	(a) for paragraph 9A there is substituted—
	"9A. The Competition Appeal Tribunal established under section 12 of the Enterprise Act 2002.";
	(b)"
	On Question, amendment agreed to.
	Schedule 25, as amended, agreed to.
	Schedule 26 agreed to.
	Clause 275 [Commencement]:
	[Amendment No. 391 not moved.]
	Clause 275 agreed to.
	Remaining clauses agreed to.
	House resumed: Bill reported with amendments.

Lord Grocott: My Lords, in rising to move the adjournment of the House for the Summer Recess, perhaps I may give one explanation; namely, that it is quite frequently the case at this time for tributes to be paid to the staff of your Lordships' House. However, following discussions among the usual channels, if I may put it that way, it is felt that the appropriate time to pay such tributes would be at the end of the Session. So that is when we can look forward to that event. In so saying, I beg to move that the House do now adjourn for the Summer Recess.

On Question, Motion agreed to.
	House adjourned for the Summer Recess at twenty-four minutes past one o'clock until Monday 7th October next.